AGL Energy announces profit drop of 33.5%

Graphical representation of shares dropping (AGL)
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Soon-to-be-demerged AGL Energy has forecast a bigger than expected slide in earnings for the coming year after posting a “very disappointing” $2.1 billion statutory full-year loss, while its revenue fell 10 per cent to $10.9 billion.

Its financials were impacted by a surprise $2.7 billion write-down of its assets, driven by unprofitable wind farm deals earlier this year.

But if those “significant items” are excluded, it earned an underlying profit of $537 million—still down 33.5 per cent compared to the same period last year, according to ABC News.

Related article: AGL confirms demerger, splits from coal assets

AGL says it will pay a final dividend of 34 cents per share—a sharp fall from last year’s payout of 54 cents per share.

Sliding wholesale prices, government pressure to cut retail rates and investors turning their backs on coal power have hurt the company’s share price during the past two years. This has contributed to its demerger decision, where it will split into two businesses—Accel and AGL Australia—by June 2022.

“Our FY21 result reflects a challenging year for AGL Energy as we realised the impact of lower wholesale electricity prices, reduced electricity generation output at peak periods, and the roll-off of legacy supply contracts in wholesale gas,” AGL chief executive Graeme Hunt said.

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